Chelsea's failure to make it past the group stages of the Champions League in
December was music to the ears of Ladbrokes chief executive and Leeds United
fan Richard Glynn.

The unexpected result, plus patchy performances from other Premier League football teams such as Arsenal, was one of the drivers behind a 7.4pc jump in revenue last year to £1bn.

Pre-tax profit grew 49.1pc to £200.7m in the 12 months to December 31 as the chain’s betting shops – of which there are almost 2,200 in the UK – continued to draw in punters. The bookie yesterday declared a final dividend of 4.6p a share, taking the full-year payout to shareholders to 8.9p, up 14.1pc.

The solid full-year result brought to an end a tumultuous 12 months for the group after it issued a profit warning on its digital division last summer. A website due to launch in time for the Euro 2012 football championships had to be postponed because of technology problems. The profit warning heaped pressure on Mr Glynn, who decided to pursue an organic digital growth strategy after walking away from several takeover deals for online specialists including Sportingbet and 888 Holdings.

Digital was, as expected, a drag on 2012 results, with operating profit in that division falling by 39.3pc to £31.8m.

However, Mr Glynn insisted there was “evidence of some green shoots” in Ladbrokes’ online business.

All customers will be transferred to the long-awaited new website by the end of March. A new mobile phone platform will follow in the second quarter.

Ladbrokes recently acquired Irish betting exchange Betdaq in a €30m (£26m) deal, which although not a transformational acquisition, will widen the company’s online offering.

The jury is still out on whether Ladbrokes’ £50m organic digital strategy will come off or whether Mr Glynn will have to make further acquisitions to close the gap on rivals such as William Hill and Paddy Power online – a possibility he has not ruled out.

However, it’s difficult to pick holes in results from the betting shops, which still make up the lion’s share of group operating profit. The UK betting shops grew profit 18.6pc last year to £180.7m as punters continue to place bets over the counter as well as using in-store betting and gaming machines. Net revenue growth from machines grew 13.9pc while “over the counter” net revenue was up 3.8pc on 2011.

With the long-awaited launch of the new website just around the corner and a lot of football results still going the bookies’ way in January, there is plenty of cause for optimism. Ivor Jones, an analyst at Numis, points out that with net debt – which stood at £386.9m at the end of the year, down £67m – now at 1.5 times earnings before interest, taxes, depreciation and amortisation, Ladbrokes is in a position to “at least” carry on raising the dividend.

That said, there are headwinds blowing the way of UK bookmakers. The Government earlier this month introduced a 20pc tax on profits from gaming machines and Ladbrokes has also reported signs the machines market “is becoming more competitive”.

While Mr Glynn is optimistic on the digital business, he also includes the caveat that there is “much still to do” in order to transform that division.

Ladbrokes shares, trading on current price-earning multiple of 13 times, trade at a discount to its rival William Hill. However, Questor doesn’t yet feel confident enough to shorten the odds and upgrade to buy. Hold.